Level 3


Client gave $10k of their RMD via a QCD direct to charities from Traditional IRA.  All good.  That should reduce their taxable amount by the $10k.  Input on screen 13.1 the $10k as a Charitible IRA distribution.  So far, so good.  Well, then it routes through the 8606 as they have some prior non deductible contributions.  My question is this.  IF the RMD was $70k, therefore with the $10k QCD only $60k would be taxable.  Shouldn’t the amount flowing to the 8606 for the taxable ratio also be this $60k and not the full RMD of $70k?  Seems they have lost all tax benefit.  Or I am not seeing a calculation / worksheet for this being handled properly.  Anyone know?  Do I need to do more than fill in the amount in that one box on 13.1?

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